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In his historical account on the diffusion of the machine tool industry in the US, Rosenberg (1963) has shown many examples on how learning occurs between different industries. On the econometric side, Scherer (1982) presented a new database in which R&D affects total factor productivity (TFP) both via internal process work and the purchase of R&D-embodying products. Scherer has also calculated that three quarters of inventions in a given industry are used outside that industry. The precise measurement of the relationship between R&D, knowledge generation, innovative output and productivity growth is one of the major topics economists have studied in the last fifty years. In doing so they have faced the problem that productivity and innovation - at company, industry and aggregate level - do not depend solely upon investment decisions of the specific companies, industries or countries, but also depend upon knowledge produced by agents active in other industries (Griliches, 1979). While nowadays the term spillover is often used as a synonym for any kind of knowledge flow or transfer, the idea of spillover was born tightly linked to the idea of externality. The issue is key because economic growth and catching up depend upon the importance of knowledge externalities (e.g. Grossman and Helpman 1991).It is clearly out of the scope of this chapter to survey the vast literature on knowledge spillovers (see Ch. XXX of this handbook). This chapter, instead, focuses specifically on inter-industry spillovers and it is constructed as follows. In Section 2 we underline the main conceptual issues and the main approaches of the empirical literature. The intrinsic difficult of identifying precisely the nature of the knowledge spillovers goes together with considerable heterogeneity in empirical methodologies. Our focus is mainly on econometric contributions (rather than theoretical modeling or case studies); however, also in this case, it is very difficult to provide a complete and extensive account of the existing literature. Section 3 discusses some issues related to inter-industry spillovers measurement. In particular, the estimation of inter-industry spillovers requires information about the fraction of R&D performed in one industry that is used in another industry. Accordingly, Section 3 discusses different types of inter-industry matrices that can be used to approximate inter-industry technological flows. Finally, Section 4 presents two examples based on Keller (2002) and Malerba et al. (2013) and provide an illustration of empirical analysis of inter-industry spillovers. Section 5 concludes and discusses possible future lines of research.

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